50 percent premium, $60+ a share could be conservative in a bidding war
ViroPharma Drug Appeal Seen Driving 50% Return: Real M&A
By Brooke Sutherland - Sep 19, 2013 5:07 PM ET
ViroPharma Inc. (VPHM), the maker of drugs for rare diseases that rallied on optimism it will be the next biotechnology takeover target, could fetch a 50 percent premium in a deal.
The stock already surged as much as 34 percent to a 13-year high after Bloomberg News reported ViroPharma is working with Goldman Sachs (GS) Group Inc. on a possible auction and attracted interest from suitors including European drugmakers Sanofi and Shire Plc (SHP), citing people familiar with the process. JMP Group Inc. said the $2.6 billion seller of a treatment for hereditary angioedema, an inflammatory condition, could fetch $60 a share, compared with $40 yesterday.
Sanofi and Shire may be drawn by the chance to market ViroPharma’s drugs through existing salesforces and snap up the company’s pipeline while investors aren’t fully valuing its future revenue opportunities, said Oppenheimer Holdings Inc. and shareholder Penn Capital Management Co. Even after the gains, the Exton, Pennsylvania-based company traded yesterday at a lower multiple of projected sales than 87 percent of similar-sized U.S. peers, according to data compiled by Bloomberg.
“I’m certainly not surprised that they attracted interest,” Richard Simons, a Philadelphia-based analyst at Penn Capital, which oversees more than $7 billion including ViroPharma shares, said in a phone interview. “In terms of the pipeline, it’s very underappreciated. There are a lot of potential shots on goal that aren’t reflected in the stock.
So the story is VPHM got an unsolicited offer and went to GS to see if they could find other possible suitors. GS then contacted various companies and received expressions of interest from SNY and SHPG. I wonder how many companies GS approached, who apart from these two is really interested, and which firm made the initial offer (it may not be either Shire or Sanofi). If there is real interest I'd expect developments sooner rather than later... definitely before xmas.